Dear Startup Investor: Why You Need to Know about Conflict Before You Commit

Dear Startup Investor: Why You Need to Know about Conflict Before You Commit

The truth is that starting up is one thing, but staying alive is another. Research shows that half of new business startups fail within the first five years of operation, and over 60% fail due to negative outcomes from conflict. Noam Wasserman’s research on startups, described in his best-selling book The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, reveals this: Most business startups ‘sink’ not because of lack of planning, failure to test the market or undercapitalization, but rather due to interpersonal complexities, destructive co-founder disputes, destructive team dynamics, and people problems.

Another truth is that conflict is a necessary part of successfully running a business. This is because conflict is a natural occurrence which can happen any time two or more individuals have different ideas, wants, and needs. Conflict is normal in any environment. However, if not properly managed, conflict can escalate into disagreement and become entrenched to a point of no return for a young, fragile business.

Read More